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The House Energy Resources Committee met jointly with the House Natural Resources Committee to discuss water use and various technologies associated with the recycle and reuse of water in oil and gas production.
 
Railroad Commission
Commissioners Christi Craddick, David Porter and Ryan Sitton

  • Commissioner Porter – overview of recent projects and no single case of water contamination as a result of hydraulic fracturing
  • Commissioner Sitton – gave insight on current position of industry, everyone is committed to responsible use of water as well as share lessons learned
    • 2012: Of 254 counties – 218 counties all of mining represented less than 5% of water used for mining
  • Commissioner Craddick – water is really important, request from industry to adopt new recycling rules, thinks they have best practices rule in place
    • Brackish, effluent water, close loop system, desalination, fracking without water all opportunities of industry looking at options themselves – overregulation can kill an industry
  • Rich Parsons has come on for media relations and other new personnel listed – “new perspective” said Craddick
  • Recycling permits can vary in time and take up to one year – trying to increase response time and will get more details to the committee
    • Chair Darby said needs should be responded to in a more timely fashion
  • Rep. Anchia asked if information can be gathered on availability of recycled water
    • Craddick – not at this time, voluntary data information gathered and that is not on the information at this time  
  • Rep. Tracy King asked about Dimmit County pointing out large recycling done there, some as much as 40%, and if there is technology that would encourage recycling across Texas
    • Across Texas technology is there to recycle an enormous amount of water but yes, economics are extremely challenging said Sitton
    • Hesitates to agree statutory incentives are needed since he sees so much going on currently in Texas minus those incentives
  • Rep. Tracy King asked about Canadian company that was fracking in Dimmit and now out of business using gas
    • Technology is evolving
  • CO2 technology is being used but most companies are not using as primary mode
  • Rep. Dale asked about statutory barriers
    • Rules written for vertical wells and now drilling horizontal wells – working to have rules address both types 
  • There is a great amount of additional liability when recycling water noted Commissioner Sitton
  • Rep. King last session there was an attempt to address those concerns – let committee know if there is still a need to address those concerns
  • Rep. Bonnen asked about funding for Sunset process but to be pushed off another 4 years before review
    • Craddick said they have not asked for any change to schedule and expect to go through Sunset
    • Part of requirement is to pay for own Sunset and for RRC to be able to pay for it they need to ask for funding for it
    • They need to ask for permission to appropriate the funds but would also appreciate general revenue request – $1.5 million LBB estimate for review
  • Rep. Paddie asked why does permitting take up to one year and what is the specific problem
    • Think it was an efficiency issue for them
    • Solid waste recycle takes up to one year and like permitting a dump facility and subject to pretty stringent requirements
    • But some they are doing very quickly, it just depends on site and if it is protested or not
    • Resources did help, additional dollars from last session for salary did help and RRC is now working on a plan to obtain efficiencies  
  • About 30k active disposal wells permits in Texas
  • Groundwater Conservative District have notice requirements like any other groups (in regards to Marathon case questions)
  • Rep. Larson -who has primacy on disposal?
    • Historically it has been the RRC but have had cases where GCDs come in and challenge
    • Larson said it should be either administratively or statutorily addressed
    • RRC is not working on any rules with the 84th Session is ongoing
  • Was not aware of state target of how much water recycling being done in the state
  • Craddick said they do not have a target and have historically worked with TWDB, technology was relatively new a few years ago and RRC does not have reporting requirements
  • RRC has found companies usually go above and beyond if rules allow for it – not overregulation
  • Last TWDB showed lower total water taken from non-fresh water sources – so trending numbers are what RRC is looking at currently
  • Members ask for baseline and/or how is RRC measuring success since implementation of rule
    • RRC – there are some numbers that can be measured against going forward 

Texas Commission of Environmental Quality
Bryan Shaw, Toby Baker and Zak Covar

  • Bryan Shaw addressed surface water and gave brief background on TCEQ
    • Senior water rights are those rights that must be protected first
    • Responsibility to make sure those who have senior water right have ability to use that water right
    • Reviewed different permitting types
  • Toby Baker – 2.7 billion of acre-feet of brackish water in Texas
    • Provided background on permitting process – ensuring public water system provides safe drinking water
    • Desalination is regulated through the public water system – treated as innovated treatment to public water
    • Only 51 operating plants in Texas
    • Desal design criteria will actually be written into rule and will not have to be done on case by case basis – public hearing on rule will be this week Feb. 26
    • Review of Aquifer Storage and Recovery (ASR) and various classes– falls into rules when put down into an aquifer only two – City of San Antonio and City of Kerrville
  • Zak Covar – drought details reviewed, it is still continuing
    • 27% is still in either extreme or exceptional drought
    • TCEQ Drought Team – hold regular meetings and invite sister agencies in
    • Co-chair with TDEM on emergency drinking water task force and on the Drought Response Task Force
    • 6800 public water systems in Texas – over 1100 have implemented outdoor water use restrictions
    • 180 day lists – systems to let TCEQ when they have little water left
    • Watermaster program review provided – pro-active management of the water resource there are a few requirements of the water rights holders  
  • There is some detail known about brackish water underground – determined because of staff due diligence, 2.7 billion
  • Rep. Lucio – spoke on the 1944 Water Treaty – there is water owed to South Texas that is not being enforced and although federal maybe Texas can work with Mexico to help address the situation
  • Chair Darby spoke about fear of watermaster program when it was created in his region – but the program has brought stability to an instable area and overall has been a good thing
  • Chair Darby back to Keffer request on brackish water – extraordinary figure but is there enough communication in regards to data on use

Texas Water Development Board
Commissioner Kathleen Jackson and Robert Mace

  • Commissioner Jackson – provided overview of TWDB and noted reliability is essential
  • Robert Mace – handouts provided reviewed total water use by industry and details regarding mapping
    • They are working on study’s in 8 areas of Texas based on need for the next 5 years – these studies are requested before “the ink is dry” and goal is to help develop data to help Texas meet goals of future water demands
    • Eventually all areas in the state of Texas will be done but will take an additional 15 years
  • Rep. Lucio mentioned opened canals are very outdated while one source said they put a pipe in 2 miles of that open canal and saved 30% of water loss in the pipe but problem is irrigation districts are not incentive to fund those type of projects
  • Rep. Anchia re-visited earlier questioning of RRC in regards to measurement of success for the program – what is your thought, was the TWDB consulted or included in the RRC rule making process
    • Mace – he was not involved but will check with staff to see if someone else was
    • TWDB base numbers that Anchia referred to is from a 2011 study conducted by the U.S. Bureau of Economic Geology
    • Information out in the public domain they can get

Jimmy Carlisle, Fasken Oil and Ranch

  • Provided overview of ranch
  • 500 vertical wells on C ranch and each well takes about 43k of barrels of water in addition to sand
  • 12k barrels of water just for operations
  • They have 2k more wells to build
  • They have made a move to eliminate use of fresh water and accomplished that in June 2014 –saving of 55k barrels in every well
  • Studied brackish water, 2013 nano-filtration technology implemented, 2014 added a membrane
  • Recycle about 8k barrels per day
  • Keys to success:
    • Decision was done internally 
    • Economies of scale – could make this work on massive acreage
    • RRC had smart regulations that encourages producers to recycle water

Cal Cooper, Apache Corporation

  • Have tried sine 2012 to go off fresh water
  • Had to learn how to treat and produce brackish water in order to have recycled water and have it cost less than other options
  • The choice was driven in the beginning by economics and also by economies of scale
  • They took 80k trucks off the Texas roads
  • They were in the hold in the beginning but it worked out – this process needs to be cost effective
  • They report on FracFocus what type of water they used and they do it voluntarily – publicly they report the big numbers

Steve McNair, Pioneer Waste Management

  • Quickly reviewed handouts
  • HQ in Midland
  • Plan where recycling plays a big art of it
  • Need to develop expertise in house
  • Less road traffic and trucks because of recycling – in just Midland there is 2k less trucks a day
  • Goal from them is to reduce reliance on fresh water
  • They have several recycling plants in operation
  • Ready to ramp up when oil and gas prices recover
  • They have a commercial group and set up and work with other operators – there will be a good market for smaller operators

Q&A of panel

  • Rep. T. King knows Fasken but not familiar with availability of groundwater resources – resources outside of Midland are decent but not prolific said witness
    • Fasken is still in vertical stage
    • Solids are taken to a landfill – goes through waste process and is disposed of in commercial disposal
  • Paddie – Carlisle said smart regulations from RRC are reason they were able to accomplish what they have
    • Statewide Rule 8 – that encouraged all operators to recycle
  • Rep. Wu said same topics discussed last session – focus was cost of water still more expensive and it was economic issue – is use of recycle water based on change of price or using more  expensive process?
    • Pioneer, McNair – various types of recycling and they employ all types and cost vary by method & slick water vs hybrid gel fracking (they use hybrid gel fracking)
    • Fasken, Carlisle don’t do it on economics – do it because owner said going to stop using fresh water from under the ranch if they can do so
    • Apache, Cooper – can’t get fresh water as cheap as Fasken which is why they put funding in the technologies
  • Chair Darby would like to see more data without violating propriety information
  • Chair Darby – are you working together with municipalities
    • Pioneer, McNair said they have capacity for other operations – COO said think big and don’t under design but have not yet have those conversations about it  

Brent Halldorson, Fountain Quail and Chair of Texas Water Recycling Assoc.

  • Oldest water recycler in state of Texas
  • Water they recycle is not an insignificant amount
  • Come up with product to make it higher quality and it makes recycling the lowest cost solution
  • Recycling is often the low cost solution
  • Recycling is part of chain now (recycling clause in contracts) and become mainstream
  • Permian basin is perfect storm for recycling
  • Texas has the best recycling rules in the world – Texas is a tip of sphere and in exciting time
  • Crash in oil and gas is hurting all activities including water recycling
  • Makes since to combine recycling and disposal
  • Asked member companies to voluntary report their volumes of water recycled and will bring that good data back to the committee
  • Water used in oil and gas industry doesn’t mean it is wasted – it can be managed
     

Mark Lambert, CEO IDE Americas

  • Desalination technology and member of Desal tech
  • Cost of desal – is separating salt from water – has come down substantially over the last decade and becomes a security supply
  • World’s largest desal plant was commissioned in Israel
  • Scale makes sense in cost – larger the facility then cheaper the cost
  • Thinks seawater desal could be done somewhere between $3-4 a thousand gallons
  • Rep. Riddle – asked about Israel plant, they don’t quite as far to travel, does cost include transportation
    • Israel were staring a decade ago at drought and today using 80% desal for water needs
    • 50-70 wide so shorter distance to travel than in Texas but many drought areas live within 100 miles of the coastline
    • When you deal seawater could produce for municipality or for industry
       

Bill Norris, President of Norris LaSalle andTexas Desal Association

  • Clarified differences between desalination (brackish and seawater)
  • Need to compare apples to apples – those two types are different processes and cost
  • Brackish deasal plant in Brownsville has been expanded and cost of power to bring it in is more than the cost of power to treat it
  • Cost of transportation discussion – discussion of what it takes to develop a water supply
  • Biggest hurdle is understanding the groundwater district
    • The desal large facilities are not in groundwater district
    • Issue is since science is not there – the answer can be no
  • Concentrate is not brine – brine can be nasty substance
    • Concentrate is slightly more brackish water
       

Warren Sumner, CEO of Omni Water Solutions

  • Progress has been made – progress with law to clearly defined ownership for water as it changes hands
    • Perhaps more can be done on this law to help with liability concerns
  • Improvements have been made in frac chemistry
  • Able to use frac packages with dirty water
  • All of planning will turn into water excess – but concern when drilling picks back up
  • Cost of infrastructure – commercial disposal wells and not much recycling going on there and there ought to be
  • Find some way to incentivize water recycling – key to economics – move to where activity is already happening
  • RRC rules make recycling easier to stand up
  • Need to educate operators there is protection of ownership and liability in HB 2767 to do that
  • Chair Keffer asked about EPA concerns
    • Get very nervous when going to totalitarian one size fits all
    • If can get good rules in Texas then it will impact other states
    • Need to put stop to this EPA one size fits all approach
    • Specific EPA concern– concern about putting concentrate down disposal well

Q&A of panel

  • Costs of infrastructure of plants is discussed
  • EPA may need to change law so that water can be used for food or spraying on fields for ag use
    • Witnesses say don’t have to wait for EPA comments – eliminating red tape and keeping this all in our own sand box but at some point EPA needs to address
    • Frac to tap is convincible
    • Next stage may go to non-food crops
  • Rep. Larson – EPA has defined as what is clean safe drinking water – with technology we look at it as a continuum – where EPA could evolve is to look at different levels of contamination and proximity to point of use
  • Norris – Alice is looking to make 85% of that brackish water as their supply and supplement it with Corpus Christi surface water  
  • Rep. Herrero – how is brackish water affected because of drought? What are factors that determine its longevity of use?
    • There is a ton in the state and recharge rate is also be characterized – not known yet
    • May be interfaces between the gulf and recharge
    • Believes TWDB is trying to map and get a real handle on it
    • Member request we need to try to understand what recharges it

Luke Metzger, Environment Texas

  • All need to do part to conserve water and Texans have stepped up
  • Today more than 770 water utilities still restrict how much water can be used (rain barrels to drinking treated wastewater)
  • In parts of shale btw 3-5% of water being recycled
  • Need better data – companies need to track water using, where is it coming from, and report it
  • Build on Keffer’s law that requires disclosure to FracFocus that they report the source and composition of water, etc